What changed in this filing

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Item 1A. Risk Factors

2023-03-15 compared with 2022-03-11 · 160 added, 143 removed, 789 unchanged (28% of the section changed)

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See “Cautionary Note Regarding Forward-Looking Statements” in this Annual Report on Form 10-K.

Risks related to macroeconomic conditions

Uncertainties in global economic conditions or a decline in economic conditions, such as recession, economic downturn, and/or inflationary conditions in the U.S.

and other regions of the world in which we do business could impact customer spending patterns and materially and adversely affect our financial condition and operating results.

Uncertainties in global economic conditions that are beyond our control have in the past impacted our business and may in the future materially adversely affect our business, results of operations, financial condition and stock price.

These adverse economic conditions include inflation, slower growth or recession, new or increased tariffs and other changes to fiscal and monetary policy, higher interest rates, high unemployment, decreased consumer confidence in the economy, armed hostilities, such as the ongoing military conflict between Russia and Ukraine, foreign currency exchange rate fluctuations, and other matters that influence consumer spending and preferences.

As a result of these economic conditions, our customers may face their own financial difficulties and the demand and sale of our products to end users and the quantity of products our customers decide to purchase from us (or the mix of products demanded) could be adversely affected, and it may become more challenging to forecast our operating results and make business decisions.

Our results of operations are sensitive to changes in macroeconomic conditions that impact discretionary spending.

Some of the factors adversely affecting consumer spending include impacts of inflation and actions taken by central banks to counter inflation, levels of unemployment, consumer debt levels, changes in net worth based on market changes and uncertainty, fluctuating interest rates, credit availability, government actions, fluctuating fuel and other energy costs, fluctuating commodity prices and general uncertainty regarding the overall future economic environment.

Adverse economic changes in any of the regions in which we sell our products could reduce consumer confidence and could negatively affect net revenue and have a material adverse effect on our operating results.

Our global supply chain is large and complex.

As a result, our operations and performance depend significantly on global and regional economic conditions.

In addition to an adverse impact on demand for our products, uncertainty about, or a decline in, global or regional economic conditions can have a significant impact on our suppliers, manufacturers, logistics providers, distributors, and other partners.

Potential effects include financial instability; inability to obtain credit to finance operations; and insolvency.

A downturn in the economic environment can also lead to increased credit and collectability risk on our receivables; the failure of derivative counterparties and other financial institutions; limitations on our ability to issue new debt; reduced liquidity; and declines in the fair value of our financial instruments.

These and other economic factors can materially adversely affect our business, results of operations, financial condition and stock price.

The COVID-19 global pandemic, and any future outbreaks or other public health emergencies, could materially affect our business, liquidity, financial condition and operating results.

The COVID-19 pandemic, including resurgences and the emergence of new variants, and efforts to control its spread have significantly curtailed the movement of people, goods and services worldwide.

In light of the uncertain and continually evolving situation relating to the spread of COVID-19, both we and authorities across the U.S.

and globe have implemented precautionary measures that include varying degrees of restriction on social and commercial activity intended to minimize the risk of the virus.

While certain of these restrictions were lifted and phased re-openings occurred in some regions, some restrictions continued through fiscal 2022 in certain regions or to certain extents, and other regions have seen a resurgence of COVID-19 cases resulting in reinstitution or expansion of such measures.

These measures have impacted and may continue to impact all or portions of our workforce, operations, suppliers and customers and demand for our products and services.

There can be no certainty that such policies will continue, or that new or similar restrictions will not be imposed to address the continued spread of COVID-19 or any of its variants, or to address other outbreaks, epidemics, pandemics or public health crises, and the extent of the impact on our business and financial condition from measures to counteract the effects of a public health crisis, such as the COVID-19 pandemic, will depend on numerous evolving factors that we may not be able to accurately predict.

In particular, the COVID-19 pandemic, including resurgences and the emergence of new variants, and efforts to control its spread, has generally disrupted the operations of our customers and prospective customers, and may continue to disrupt their operations, including as a result of travel restrictions and/or business shutdowns, uncertainty in the financial markets or other harm to their business and financial results.

These disruptions have caused reduced capital spend by our existing customers and potential new customers, and could result in further reductions to capital expenditure budgets, delayed purchasing decisions, longer sales cycles, extended payment terms or missed payments, and postponed or canceled projects, any of which would negatively impact our business and operating results, including sales and cash flows.

For example, Federal customers may divert funds to address their own supply chain or other challenges, which could delay the progression of customer trials and pilots of our products into larger enterprise-wide justification, purchase and deployment of both of our devices and consumables .

The long-term effects to the global economy and to us are difficult to assess or predict and may lead to a decline in the market prices of our products, risks to employee health and safety, risks to our ability to manufacture and distribute our products and services and reduced sales in geographic locations impacted.

In addition, the strain on certain domestic and international supply chains from the COVID-19 pandemic has resulted in production slowdowns, longer lead times and negative impacts on pricing for certain of our critical components, including, among other things, electronic and plastic components necessary to manufacture our products.

Our suppliers may have to temporarily close a facility, face staffing shortages, production slowdowns and stoppages, be overwhelmed by unexpected demand or face disruptions in delivery systems which may require suppliers to locate shipping routes that avoid delivery bottlenecks, all of which could cause delays in delivery.

If our suppliers are unable to deliver the components and subassemblies we require on a timely basis, we cannot guarantee that we will be able to locate alternative sources of supply for our products on acceptable terms, or at all.

A significant portion of our field sales, customer training events and other application services have historically been conducted in person, and the rollout of our new products has historically been supported by our participation at industry conferences.

We have experienced, and may experience in the future, prolonged restrictive measures put in place in order to control the spread of COVID-19 or another pandemic, epidemic or outbreak of an infectious disease that prevented us from meeting customers in person and attending conferences, which has, and may in the future, negatively impact our ability to attract new customers or retain and expand our relationships with existing customers.

Although we continue to monitor the situation and may adjust our current policies as more information and public health guidance become available, the ongoing effects of the COVID-19 pandemic, including resurgences and the emergence of new variants, and/or the precautionary measures that we have adopted may create operational and other challenges, any of which could harm our business and results of operations.

To the extent a pandemic, epidemic or outbreak of an infectious disease in the United States such as the COVID-19 pandemic adversely affects our business, financial condition and results of operations, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, including but not limited to, those related to our ability to increase sales to existing and new customers, continue to perform on existing contracts, develop and deploy new technologies, expand our marketing capabilities and sales organization, generate sufficient cash flow to service our indebtedness, and comply with the covenants in the agreements that govern our indebtedness.

Risks related to our business and industry

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As we continue to expand and develop our business, we expect to incur significant additional expenditures in the areas of sales, marketing, research and development, and customer service and support.

Additionally, as a public company, our legal, accounting and other expenses have been, and we expect will continue to be substantially higher than the expenses we incurred as a private company.

Furthermore, we may encounter unforeseen issues that require us to incur additional costs.

We will have to generate and sustain increased revenue to achieve profitability and positive cash flow as a result of these increased expenditures.

Additionally, we may encounter unforeseen issues that require us to incur additional costs.

We will have to generate and sustain increased revenue to

achieve profitability and positive cash flow as a result of these increased expenditures.

Accordingly, if we are not able to achieve or maintain profitability and we incur significant losses in the future, the market price of our common stock may decline, and you could lose part or all of your investment.

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government agencies for a substantial portion of our revenue in any quarterly period, whereby the loss of or delay in a customer order, or any delay in our fulfillment of deliverables under a customer order, could significantly reduce our revenue for that quarter;

• market volatility or downturns caused by outbreaks, epidemics, pandemics, geopolitical tensions or conflicts, or other macroeconomic dynamics;

• the addition of new customers or the loss of existing customers;

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• service interruptions with any of our single source suppliers or subassembly manufacturers;

• unexpected costs or delays related to the COVID-19 pandemic;

• our ability to attain and maintain production volumes and quality levels for our products, and to accurately forecast customer demand for our products and consumables;

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• costs related to the acquisition and integration of companies, assets, or technologies;

• general economic conditions.

• general economic, political, or stock market conditions.

Our operating expenses are heavily based on our anticipated product revenue growth, especially as we continue to invest significant resources in building out our sales and marketing channels and the development of future products.

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We must develop new products, as well as enhancements to existing products, and adapt to rapid and significant technological change to remain competitive.

We sell our products in industries that are characterized by significant enhancements and evolving industry standards.

We sell our products in industries that are characterized by significant product enhancements and evolving industry standards.

As a result, our customers’ needs are rapidly evolving.

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As a result, to the extent we fail to accurately forecast the needs of our customers and timely introduce new and innovative products or services, or fail to obtain desired levels of market acceptance, our business may suffer and our operating results could be adversely affected.

The challenge of identifying market trends and customer needs is even more demanding for markets that we have recently entered, such as the bioprocessing market, or that we intend to enter in the future, such as the GxP quality assurance market.

The challenge of identifying market trends and customer needs is even more demanding for markets that we have recently entered, such as the bioprocessing market, or that we intend to

enter in the future, such as the GxP quality assurance market.

There is no certainty that we will effectively identify these trends and needs or introduce products that are successful.

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If we do not diversify our sales channels and effectively utilize our direct sales force, we will continue to be susceptible to risks associated with having a large percentage of revenue concentrated with a limited number of distributors.

We have a direct sales force of 25 employees and we intend to increase the size and reach of our sales team in the future, particularly those focused on the life sciences market.

Competition for employees capable of selling expensive instruments within the pharmaceutical and biotechnology industries is intense.

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If current or future distributors do not perform adequately or we are unable to enter into effective arrangements with distributors in particular geographic areas, we may not realize long-term international revenue growth.

The continuing global COVID-19 pandemic, including resurgences and the emergence of new variants, has significantly affected our business and operations , and the pandemic and supply chain challenges may impact future operations and financial performance .

The COVID-19 pandemic, including resurgences and the emergence of new variants, and efforts to control its spread have significantly curtailed the movement of people, goods and services worldwide.

In light of the uncertain and continually evolving situation relating to the spread of COVID-19, we have taken precautionary measures intended to minimize the risk of the virus to our employees, our customers and the communities in which we operate.

These measures have included temporarily closing our offices to visitors and limiting the number of employees in our offices to those that are deemed essential for manufacturing and research purposes, as well as virtualizing, postponing or canceling customer, employee and industry events.

While many of our employees have been able to return to working at our offices, many of these measures continue to be in place.

The COVID-19 pandemic has also created many negative headwinds that present risks to our business and results of operations.

For example, it has generally disrupted the operations of our customers and prospective customers, and

may continue to disrupt their operations, including as a result of travel restrictions and/or business shutdowns, uncertainty in the financial markets or other harm to their business and financial results.

These disruptions have caused reduced capital spend by our existing customers and potential new customers.

These disruptions could result in further reductions to capital expenditure budgets, delayed purchasing decisions, longer sales cycles, extended payment terms or missed payments, and postponed or canceled projects, any of which would negatively impact our business and operating results, including sales and cash flows.

We do not yet know the net impact that the COVID-19 pandemic may have on our business and cannot guarantee that it will not be materially negative.

Historically, a significant portion of our field sales, customer training events and other application services have been conducted in person, and the rollout of our new products has historically been supported by our participation at industry conferences.

Currently, as a result of the work and travel restrictions related to the COVID-19 pandemic, and the precautionary measures that we have adopted, a significant portion of our field sales and professional services activities continue to be conducted remotely, which has resulted in a decrease in our travel expenditures.

However, we have recently permitted certain of our employees to travel to our customers and industry conferences where permitted by local authorities, and expect that our travel expenditures will also begin to increase.

Any prolonged restrictive measures put in place in order to control the spread of COVID-19, including new variants, or other adverse public health developments in any of our targeted markets may have a material and adverse effect on our business operations and results of operations.

We do not yet know the extent to which such restrictions and precautionary measures, including the lifting of our travel restrictions in limited circumstances, will negatively impact on our ability to attract new customers or retain and expand our relationships with existing customers over the near and long term.

In addition, many of our suppliers are experiencing operational challenges as a result of COVID-19, which in turn may destabilize our supply chain or otherwise have an adverse effect on our ability to provide products to our customers.

The strain on certain domestic and international supply chains has resulted in shortages, longer lead times and negative impacts on pricing for certain of our critical components, including, among other things, electronic and plastic components necessary to manufacture our products.

Our suppliers may have to temporarily close a facility for disinfecting after employees tested positive for COVID-19, face staffing shortages, production slowdowns and stoppages, be overwhelmed by unexpected demand or face disruptions in delivery systems which may require suppliers to locate shipping routes that avoid delivery bottlenecks, all of which could cause delays in delivery.

Thus far, through aggressive supply chain monitoring and management, and the dedication of significant personnel resources, the difficulties experienced by our suppliers have had minimal impact on our ability to timely source necessary supplies and to ship products to our customers;

however, as the COVID-19 pandemic continues, including resurgences and the emergence of new variants, we may be forced to dedicate additional resources to obtain alternate suppliers and implement design or manufacturing changes to utilize such alternate products, and if such measures are not successful, it may negatively affect our inventory and delay delivery to our customers, which could lead to postponed revenue recognition for those transactions, and in turn could adversely affect our revenue and results of operations.

If we are unable to adequately purchase appropriate amounts of inventory, our business and results of operations may be materially and adversely affected.

Additionally, the COVID-19 pandemic has impacted, and may continue to impact, our headquarters, which is our primary corporate office, sales and marketing center and manufacturing location, including through the effects of facility closures, reductions in operating hours and other social distancing efforts.

For example, if even a small number of our employees who work in clusters relating to critical functions such as manufacturing, procurement, supply chain, and research and development, test positive for COVID-19, the entire business function could be temporarily shut down to ensure the safety of our employees and the effectiveness of business would be severely impacted.

Additionally, in light of resurgences of COVID-19 infection rates and the emergence of new variants, we cannot predict whether these conditions and concerns will continue or whether we will experience more significant or frequent disruptions in the

future, including the complete closure of one or more of our facilities.

In addition, we do not know what impact the proposed Federal vaccine mandates for federal contractors and companies with more than 100 employees, both of which would be applicable to us if allowed to be implemented, or other past and future government actions and responsive measures may have on employee retention and our ability to conduct our business.

Furthermore, as a result of the COVID-19 pandemic, we initially required all employees who were able to do so to work remotely on a full-time or partial basis.

While many of our employees have been able to return to working at our headquarters, we continue to have remote work arrangements which may have a negative impact on our operations, the execution of our business plans, the productivity and availability of key personnel and other employees necessary to conduct our business, and on third party service providers who perform critical services for us, or otherwise cause operational failures due to changes in our normal business practices necessitated by the COVID-19 pandemic and related governmental actions.

If a natural disaster, power outage, connectivity issue or other event occurred that impacted our employees’ ability to work remotely, it may be difficult or, in certain cases, impossible, for us to continue our business for a substantial period of time.

The increase in remote working may also result in increased consumer privacy, data security and fraud risks, and our understanding of applicable legal and regulatory requirements, as well as the latest guidance from regulatory authorities in connection with the COVID-19 pandemic, including with respect to the collection of proof of vaccine status, may be subject to legal or regulatory challenge, particularly as regulatory guidance evolves in response to future developments.

More generally, the COVID-19 pandemic and associated supply chain challenges have had, and are expected to continue to have, an adverse effect on economies and financial markets globally, leading to an unpredictable and volatile economic environment, which may decrease technology spending generally, adversely affect demand for our platforms and services, lead to increased costs to source supplies and/or delayed delivery of our products, and require changes to the expected timing of revenue and gross margins.

For example, Federal customers may divert funds to address their own supply chain or other COVID challenges, which could delay the progression of customer trials and pilots of our products into larger enterprise-wide justification, purchase and deployment of both of our devices and consumables.

The long-term effects of COVID-19 to the global economy and to us are difficult to assess or predict and may lead to a decline in the market prices of our products, risks to employee health and safety, risks to our ability to manufacture and distribute our products and services and reduced sales in geographic locations impacted.

It is not possible at this time to estimate the full impact that COVID-19, including resurgences and the emergence of new variants, will have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted.

To the extent the COVID-19 pandemic adversely affects our business, financial condition and results of operations, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, including but not limited to, those related to our ability to increase sales to existing and new customers, continue to perform on existing contracts, develop and deploy new technologies, expand our marketing capabilities and sales organization, generate sufficient cash flow to service our indebtedness, and comply with the covenants in the agreements that govern our indebtedness.

Labor shortages could adversely affect our results of operations.

In 2021, many companies experienced labor shortages and other labor-related issues, which were pronounced as a result of the COVID-19 pandemic.

A number of factors may adversely affect the labor force available to us or increase labor costs, including high employment levels, federal unemployment subsidies, increased wages offered by other employers, vaccine mandates and other government regulations and our responses thereto.

As more employers offer remote work, we may have more difficulty recruiting for jobs that require on-site attendance.

We have recently observed an overall tightening and increasingly competitive labor market.

If we are unable to hire and retain employees capable of performing at a high-level, our business could be adversely affected.

A sustained labor shortage, lack of skilled labor, or increased turnover within our employee base, caused by COVID-19 or as a result of general macroeconomic factors, could have a material adverse impact on our business and operating results.

We face intense and growing competition from leading technology companies as well as from emerging companies.

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Our competitors also include many smaller companies, including companies established to pursue new and emerging technologies.

We also expect additional competition in the future from new and existing companies with whom we do not currently compete directly.

We also expect additional

competition in the future from new and existing companies with whom we do not currently compete directly.

As our industry evolves, our current and potential competitors may establish cooperative relationships among themselves or with third parties, including companies with whom we have partnerships and whose products interoperate with our own, that could acquire significant market share, which could adversely affect our business.

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For example, new life sciences technology is often not adopted by the relevant market until a sufficient amount of research conducted using such technology has been published in peer-reviewed publications.

While we believe our assumptions and the data underlying our estimates of the total annual addressable market for our solutions are reasonable, these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates, or those underlying the third party data we have used, may change at any time, thereby reducing the accuracy of our estimates.

While we believe our assumptions and the data underlying our estimates of the total annual addressable market for our solutions are reasonable, these assumptions and

estimates may not be correct and the conditions supporting our assumptions or estimates, or those underlying the third party data we have used, may change at any time, thereby reducing the accuracy of our estimates.

As a result, our estimates of the annual total addressable market for our solutions may be incorrect.

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We believe our platform has potential applications across a wide range of markets and we have targeted certain markets in which we believe we have a higher probability of success or revenue opportunity or for which the path to commercialize products and realizing or achieving revenue is shorter.

For example, in 2018 we entered into agreements regarding a specific government program opportunity to develop an aerosol vapor detector, and more recently we entered into several engagements related to the evaluation of our products within the cell therapy and gene therapy markets.

We seek to continue to prioritize opportunities and allocate our resources among our programs to maintain a balance between advancing near-term opportunities and exploring additional markets for our technology.

For example, we have entered into agreements regarding a specific government program opportunity to develop an aerosol vapor detector, and more recently we entered into several engagements related to the evaluation of our products within the cell therapy and gene therapy markets.

We seek to continue to prioritize opportunities and allocate our resources among our programs to maintain a

balance between advancing near-term opportunities and exploring additional markets for our technology.

However, due to the significant resources required for the development of workflows for new markets, we must make decisions regarding which markets to pursue and the amount of resources to allocate to each.

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We rely on our senior management to manage our existing business operations and to identify and pursue new growth opportunities.

The loss of any member of senior management could significantly

delay or prevent the achievement of our business objectives and their replacement would likely involve significant time and expense.

The loss of any member of senior management could significantly delay or prevent the achievement of our business objectives and their replacement would likely involve significant time and expense.

As we continue to scale our business, we may find that certain of our products, certain customers or certain markets, including the biopharmaceutical market, may require a dedicated sales force or sales personnel with different experience than those whom we currently employ.

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Identifying, recruiting and training additional qualified personnel will require significant time, expense and attention.

In addition, the continued development of complementary software tools, such as our analysis tools and visualization software, requires us to compete for highly trained software engineers in the Boston area and for highly trained customer service personnel globally.

In addition, the continued development of

complementary software tools, such as our analysis tools and visualization software, requires us to compete for highly trained software engineers in the Boston area and for highly trained customer service personnel globally.

We do not have fixed term employment contracts with any of our employees.

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Identifying and qualifying an alternate source may take time and involve additional expense, and there is no guarantee that the alternate source will perform as expected.

If our customers experienced a shortage or delay in consumables, such as swab samplers, microfluidic chips, or assay kits, or if these consumables do not perform at the levels our customers expect, our business could be materially and adversely impacted.

If our customers experienced a shortage or delay in consumables, such as swab samplers, microfluidic chips, or assay kits, or if these

consumables do not perform at the levels our customers expect, our business could be materially and adversely impacted.

In addition, we maintain relatively low inventory and acquire components based upon anticipated annual demand.

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Additionally, damage to a manufacturing facility or other property of any of our suppliers, due to fire, flood or other natural disaster or casualty event may have a material adverse effect on our business, financial condition and results of operations.

For additional risks related to the supply of necessary components, refer to the risk factor entitled “ The continuing global COVID-19 pandemic, including resurgences and the emergence of new variants, has significantly affected our business and operations, and the pandemic and supply chain challenges may impact future operations and financial performance ” above.

For additional risks related to the supply of necessary components, refer to the risk factor entitled “ The COVID-19 global pandemic, and any future outbreaks or other public health emergencies, could materially affect our business, liquidity, financial condition and operating results ” above.

Our current research and development efforts may not produce significant revenue for several years, if at all.

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Further, in the event that an end user makes an error or fails to analyze a particular substance correctly, our product may be associated with a failure to identify a substance that ultimately turns out to be harmful, or, conversely, be associated with a false alarm raised over a substance that turns out to be benign.

We also provide customer support services, such as in connection with our

“Reachback” program described in the “Business” section of our Annual Report on Form 10-K.

We also provide customer support services, such as in connection with our “Reachback” program described in the “Business” section of our Annual Report on Form 10-K.

It is possible that incorrect or inaccurate information may be delivered to a customer in the context of one or more support consultations.

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We may also be subject to unwanted media attention, warranty claims or breach of contract for damages related to errors or defects in our products and solutions.

If we experience a significant disruption in our information technology systems or breaches of data security, our business could be adversely affected.

If we experience a significant disruption in our information technology systems and infrastructure, or breaches or compromises of data security, our business could be adversely affected.

We rely on information technology systems to keep financial records, facilitate our research and development initiatives, manage our manufacturing operations, maintain quality control, fulfill customer orders, maintain corporate records, communicate with staff and external parties and operate other critical functions.

Our information technology systems are potentially vulnerable to disruption due to breakdown, malicious intrusion and computer viruses or other disruptive events including, but not limited, to natural disasters and catastrophes.

Our information technology systems and infrastructure are potentially vulnerable to breakdown or damage or interruption or otherwise may sustain damage from malicious intrusion and computer viruses, data breaches, phishing attacks, cybercriminals, system

malfunction, natural disasters and catastrophes (including hurricanes and earthquakes), terrorism, war and telecommunication and electrical failures, or other disruptive events.

Cyberattacks and other malicious internet-based activity continue to increase and cloud-based platform providers of services have been and are expected to continue to be targeted.

In addition to traditional computer hackers, malicious code (such as viruses and worms), employee theft or misuse, denial-of-service attacks and sophisticated nation-state and nation-state supported actors now engage in attacks (including advanced persistent threat intrusions).

Despite significant efforts to create security barriers to such threats, it is virtually impossible for us to entirely mitigate these risks.

If our security measures are meaningfully compromised as a result of third party action, employee or customer error, malfeasance, stolen or fraudulently obtained log-in credentials or otherwise, our reputation could be damaged, our business may be harmed and we could incur significant liability.

If we were to experience a prolonged system disruption in our information technology systems or those of certain of our vendors, it could negatively impact our ability to serve our customers, which could adversely impact our business.

In addition to traditional computer hackers, malicious code (such as viruses and worms), phishing attacks and social engineering, business email compromise, employee theft or misuse, denial-of-service attacks and sophisticated nation-state and nation-state supported actors now engage in attacks (including advanced persistent threat intrusions).

Because the techniques used by threat actors who may attempt to penetrate and sabotage our computer systems or those of our vendors or partners change frequently and may not be recognized until launched against a target, we may be unable to anticipate these techniques.

Therefore, despite significant efforts to create security barriers to such threats, it is virtually impossible for us to entirely mitigate these risks.

If our security measures or those of our vendors and partners are meaningfully compromised as a result of third party action, employee or customer error, malfeasance, stolen or fraudulently obtained log-in credentials, hostile foreign governments, industrial espionage, wire fraud or otherwise, our reputation and customer trust could be damaged, our business, results of operations and financial condition may be harmed and we could incur significant liability.

If we were to experience a prolonged system disruption in our information technology systems and infrastructure or those of certain of our vendors, it could negatively impact our ability to serve our customers, which could adversely impact our business.

If operations at our facilities were disrupted, it may cause a material disruption in our business if we are not capable of restoring functionality on an acceptable timeframe.

In addition, our information technology systems (and those of our vendors and partners) are potentially vulnerable to data security breaches, whether by internal bad actors (e.g., employees) or external bad actors (attacks of which are becoming increasingly sophisticated, including social engineering and phishing scams), which could lead to the exposure of personal data, sensitive data and confidential information to unauthorized persons.

Such data security breaches could lead to the loss of trade secrets or other intellectual property, or could lead to the exposure of personal information (including sensitive personal information) of our employees, customers and others, any of which could have a material adverse effect on our business, reputation, financial condition and results of operations.

In addition, our information technology systems (and those of our vendors and partners) are potentially vulnerable to data security compromises or breaches, whether by internal bad actors (e.g., employees) or external bad actors (attacks of which are becoming increasingly sophisticated, including social engineering and phishing scams), which could lead to the exposure of personal data, sensitive data and confidential information to unauthorized persons.

Further, it is possible that unauthorized access to our data may be obtained through inadequate use of security controls by suppliers or other vendors.

We rely on such third parties to implement effective security measures and identify and correct for any failures, deficiencies or breaches.

Such data security compromises or breaches to our data, whether stored on our systems or on those of third parties, could lead to the loss of trade secrets or other intellectual property, or could lead to the exposure of personal information (including sensitive personal information) of our employees, customers and others, any of which could have a material adverse effect on our business, reputation, financial condition and results of operations.

In addition, any such access, disclosure or other loss or unauthorized use of information or data could result in legal claims or proceedings, regulatory investigations or actions, and other types of liability under laws that protect the privacy and security of personal information, including federal, state and foreign data protection and privacy regulations, violations of which could result in significant penalties and fines.

In addition, although we seek to detect and investigate all data security incidents, security breaches and other incidents of unauthorized access to our information technology systems and data can be difficult to detect and any delay in identifying such breaches or incidents may lead to increased harm and legal exposure of the type described above.

The cost of investigating, mitigating and responding to potential data security breaches and complying with applicable breach notification obligations to individuals, regulators, partners and others can be significant.

In addition, although we seek to detect and investigate all data security incidents, breaches or compromises, these events can be difficult to detect and any delay in identifying such breaches, incidents or compromises may lead to increased harm and legal exposure of the type described above.

The cost of investigating, mitigating and responding to potential data security breaches or compromises and complying with applicable breach notification obligations to individuals, regulators, partners and others can be significant.

Our insurance policies may not be adequate to compensate us for the potential costs and other losses arising from such disruptions, failures or security breaches.

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Our international operations are subject to a variety of risks that we do not face in the United States, including:

• adverse or uncertain macroeconomic conditions, including a global economic downturn or recession;

• global impacts of inflation and actions taken by central banks to counter inflation;

• the rising cost of labor in the foreign countries in which we and our suppliers operate, resulting in increases in our costs of doing business internationally;

• geopolitical conditions, including changes in a specific country's or region's political or economic conditions, including the ongoing military conflict between Russia and Ukraine and the threat that such conflict could spread to other parts of Europe;

• the difficulty of increased travel, infrastructure and legal compliance costs associated with developing international revenue;

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• many, if not most, foreign governments are investing less in safety and security and in technology to detect dangerous chemicals than the U.S.

• general economic conditions in the countries in which we operate;

• additional withholding taxes or other taxes on our foreign income, and tariffs or other restrictions on foreign trade or investment;

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Our failure to manage these risks successfully could harm our international operations, reduce our international sales and increase our costs, thus adversely affecting our business, operating results and financial condition.

Compliance with global privacy and data security requirements could result in additional costs and liabilities to us or inhibit our ability to collect and process data globally, and the failure to comply with such requirements could subject us to significant fines and penalties, which may have a material adverse effect on our business, financial condition or results of operations.

The regulatory framework for the collection, use, safeguarding, sharing, transfer and other processing of information worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future.

Compliance with global data protection, privacy and data security requirements could result in additional costs and liabilities to us or inhibit our ability to collect and process data globally, and the failure to comply with such requirements could subject us to significant fines and penalties, which may have a material adverse effect on our business, financial condition or results of operations.

The legislative and regulatory framework for the collection, use, safeguarding, sharing, transfer and other processing of personal information worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future.

Internationally, laws, regulations and standards in many jurisdictions apply broadly to the collection, use, retention, security, disclosure, transfer and other processing of personal information.

For example, the European General Data Protection Regulation, or the GDPR, which took effect across all member states of the European Economic Area, or the EEA, in May 2018, greatly increased the European Commission’s jurisdictional reach of its laws and adds a broad array of requirements for handling personal data.

The GDPR, together with national legislation, regulations and guidelines of the EEA member states and the United Kingdom governing the processing of personal data, impose strict obligations and restrictions on the ability to collect, use, retain, protect, disclose, transfer and otherwise process personal data.

In particular, the GDPR includes obligations and restrictions concerning the consent and rights of individuals to whom the personal data relates, the transfer of personal data out of the European Economic Area or the United Kingdom, security breach notifications

and the security and confidentiality of personal data.

The GDPR authorizes fines for certain violations of up to 4% of global annual revenue or €20 million, whichever is greater.

All of these evolving compliance and operational requirements may require us to modify our data processing practices and policies, which in turn could distract management or divert resources from other initiatives and projects.

Any failure or perceived failure by us to comply with any applicable laws and regulations relating to data privacy and security could result in damage to our reputation, as well as proceedings or litigation by governmental agencies or other third parties, including class action privacy litigation in certain jurisdictions, which would subject us to significant fines, sanctions, awards, penalties or judgments, all of which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

For example, the collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the European Union (“EU”) is subject to the EU General Data Protection Regulation(“EU GDPR”), which took effect across all member states of the European Economic Area, or the EEA, in May 2018.

Following the United Kingdom’s (“UK”) withdrawal from the EU (“Brexit”), the EU GDPR has been incorporated into UK laws (“UK GDPR”) (together with the EU GDPR, “GDPR”).

The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including granting individuals certain rights with respect to their personal data, including rights of access and deletion in certain circumstances, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors.

The GDPR also imposes strict rules on the transfer of personal data to countries outside the European Economic Area and the UK, including the United States, and permits data protection

authorities to impose large penalties for violations of the GDPR, including potential fines of up to 4% of global annual revenue or €20 million (£17.5 million), whichever is greater.

All of these evolving compliance and operational requirements may require us to modify our data processing practices and policies, put in place additional compliance mechanisms, and review our technologies, systems and practices, as well as those of any third-party collaborators, service providers, contractors or consultants that store, process or transfer personal data on our behalf, which in turn could distract management or divert resources from other initiatives and projects.

Any failure or perceived failure by us to comply with any applicable laws and regulations relating to data protection, privacy and security could result in damage to our reputation, as well as proceedings or litigation by governmental agencies or other third parties, including class action privacy litigation in certain jurisdictions, which would subject us to significant fines, sanctions, awards, penalties or judgments, all of which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Our loan and security agreement contains covenants, which restrict our operating activities, and we may be required to repay the outstanding indebtedness in an event of default, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

On March 11, 2021, we entered into an Amended and Restated Loan and Security Agreement, or the 2021 Revolver, with Signature Bank, or the Lender .

This agreement created a revolving line of credit totaling $25.0 million and replaced the existing term loan.

The 2021 Revolver subjects us to various customary covenants, including requirements as to financial reporting and financial covenants (including an unrestricted minimum cash level of $10.0 million), and restrictions on our ability to dispose of our business or property, to change our line of business, to liquidate or dissolve, to enter into any change in control transaction, to merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, to incur additional indebtedness, to incur liens on our property, to pay any dividends or make other distributions on capital stock other than dividends payable solely in capital stock, to redeem capital stock, to enter into in-bound licensing agreements, to engage in transactions with affiliates, and to encumber our intellectual property.

Our business may be adversely affected by these restrictions on our ability to operate our business.

We are permitted to make interest-only payments on the revolving line of credit through March 11, 2024, at which time all outstanding indebtedness shall be immediately due and payable.

On November 2, 2022, we entered into a Loan and Security Agreement, or the 2022 Revolver, with Silicon Valley Bank, or the Lender .

This agreement created a revolving line of credit totaling $35.0 million and replaced the prior $25.0 million revolving line of credit.

The 2022 Revolver subjects us to various customary covenants, including requirements as to financial reporting and financial covenants (including a requirement that the amount of unrestricted and unencumbered cash minus advances under the 2022 Revolver, is not less than the amount equal to the greater of (i) $10.0 million or (ii) nine (9) months of cash burn), and restrictions on our ability to change the principal nature of our business, dispose of our business or property, engage in any change of control transaction, merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, incur additional indebtedness or liens, pay dividends or make other distributions on capital stock, redeem our capital stock, engage in transactions with affiliates or otherwise encumber our intellectual property, in each case, subject to customary exceptions.

We are permitted to make interest-only payments on the revolving line of credit through November 2, 2025, at which time all outstanding indebtedness shall be immediately due and payable.

However, we may be required to repay the outstanding indebtedness under the revolving line of credit if an event of default occurs under the 2022 Revolver.

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we are unable to pay our debts as they become due;

or we default on contracts with third parties which would permit the third party to accelerate the maturity of such indebtedness or that could have a material adverse change on us.

or we default on contracts with third parties which would permit the third party to accelerate the maturity of such indebtedness above certain thresholds or that could have a material adverse effect on our business or operations.

We may not have enough available cash or be able to raise additional funds through equity or debt financings to repay such indebtedness at the time any such event of default occurs.

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A natural or other disaster, such as a fire or flood, could cause substantial delays in our operations, damage or destroy our manufacturing equipment or inventory, and cause us to incur additional expenses.

The insurance we maintain against fires, floods and other natural disasters may not be adequate to cover our losses in any particular case.

The insurance we maintain against fires, floods and other natural disasters may not be

adequate to cover our losses in any particular case.

With or without insurance, damage to our manufacturing facility or our other property, or to any of our suppliers, due to fire, flood or other natural disaster or casualty event may have a material adverse effect on our business, financial condition and results of operations.

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Any such event or activity, among others, could cause governments and governmental agencies to delay or refrain from purchasing our products and services in the future, reduce the size or payment amounts of purchases from existing or new government customers, or otherwise have an adverse effect on our business, results of operations, financial condition and prospects.

For additional risks related to government actions and responsive measures to the COVID-19 pandemic, refer to the risk factor entitled “ The continuing global COVID-19 pandemic, including resurgences and the emergence of new variants, has significantly affected our business and operations, and the pandemic and supply chain challenges may impact future operations and financial performance ” above.

government programs are limited by budgetary constraints and political considerations and are subject to uncertain future funding levels that could result in the termination of programs.

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government has the right to audit our costs even after job completion and after we have billed and recognized the corresponding revenue.

government also may review the adequacy of, and a contractor’s compliance with, its internal control systems and policies, including the contractor’s purchasing, property, estimating, compensation and management information systems.

Any costs found to be improperly allowed or

improperly allocated to a specific contract will not be reimbursed, and any such costs that have already been reimbursed must be refunded, which would affect associated revenue that had already been recognized.

government also may review the adequacy of, and a contractor’s compliance with, its internal control systems and policies, including the contractor’s purchasing, property,

estimating, compensation and management information systems.

Any costs found to be improperly allowed or improperly allocated to a specific contract will not be reimbursed, and any such costs that have already been reimbursed must be refunded, which would affect associated revenue that had already been recognized.

While we intend to implement uniform procurement and compliance programs for all of our business, we may be subject to more risks from these audits until we are able to implement such a program effectively.

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Our current license agreements impose, and we expect that any future exclusive in-bound license agreements will impose, various development, diligence, commercialization and other obligations on us.

We have also entered into engagements in the past, and may enter into engagements in the future, with other partners and customers under which we obtain certain intellectual property rights relating to our platform and technology.

We have also entered into engagements in the past, and may enter into engagements in the future, with other partners and customers under which we obtain certain intellectual property rights

relating to our platform and technology.

These engagements take the form of exclusive licenses, non-exclusive licenses, or assignment of actual ownership of intellectual property rights or technology from third parties.

Our rights to use the

technology we license are subject to the continuation of and compliance with the terms of those agreements.

Our rights to use the technology we license are subject to the continuation of and compliance with the terms of those agreements.

In some cases, we may not control the prosecution, maintenance or filing of the patents and patent applications to which we hold licenses, or the enforcement of those patents against third parties.

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In addition, the patent position of companies in the biotechnology field is particularly uncertain.

Various courts, including the United States Supreme Court have rendered decisions that affect the scope of patentability of certain inventions or discoveries relating to biotechnology.

Various courts, including the United States Supreme Court have rendered decisions that affect the scope of patentability of certain

inventions or discoveries relating to biotechnology.

These decisions state, among other things, that a patent claim that recites an abstract idea, natural phenomenon or law of nature are not themselves patentable.

Precisely what constitutes a law of nature or abstract idea is uncertain, and it is possible that certain aspects of our technology could be considered

natural laws.

Precisely what constitutes a law of nature or abstract idea is uncertain, and it is possible that certain aspects of our technology could be considered natural laws.

Accordingly, the evolving case law in the United States may adversely affect our ability to obtain patents and may facilitate third party challenges to any owned or licensed patents.

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Some of our patents or patent applications (including in-bound licensed patents) have been or may be challenged at a future point in time in opposition, derivation, reexamination, inter partes review, post-grant review or interference.

Any successful third party challenge to our patents in this or any other proceeding could result in the unenforceability or invalidity of such patents, which may lead to increased competition to our business, which could harm our business.

Any successful third party challenge to our patents in this or any other proceeding could result in the unenforceability or invalidity of such

patents, which may lead to increased competition to our business, which could harm our business.

In addition, in patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace.

The outcome following legal assertions of invalidity and unenforceability during patent litigation is unpredictable.

defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on certain aspects of our platform technologies.

If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on certain aspects of our platform technologies.

In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop, or commercialize current or future products.

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Some of our competitors may be able to sustain the costs of complex intellectual property litigation more effectively than we can because they have substantially greater resources.

In addition, any uncertainties resulting from the initiation and continuation of any litigation could significantly limit our ability to continue our operations.

In addition, any uncertainties resulting from

the initiation and continuation of any litigation could significantly limit our ability to continue our operations.

Any of the foregoing could disrupt our business and have a material adverse effect on our operating results and financial condition.

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In addition, our agreements with some of our customers, suppliers or other entities with whom we do business require us to defend or indemnify these parties to the extent they become involved in infringement claims, including the types of claims described above.

We could also voluntarily agree to defend or indemnify third parties in instances where

we are not obligated to do so if we determine it would be important to our business relationships.

We could also voluntarily agree to defend or indemnify third parties in instances where we are not obligated to do so if we determine it would be important to our business relationships.

If we are required or agree to defend or indemnify third parties in connection with any infringement claims, we could incur significant costs and expenses that could adversely affect our business, financial condition, results of operations, and prospects.

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The market price of our common stock has been volatile and could continue to be volatile.

Since the shares were sold in our initial public offering in December 2020 at a price of $20.00 per share, the price per share of our common stock has experienced significant fluctuations.

Since the shares were sold in our initial public offering in December 2020, the price per share of our common stock has experienced significant fluctuations.

Some of the factors that may cause the market price of our common stock to fluctuate, many of which may be beyond our control, include:

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• litigation involving our company, our general industry or both;

• additions or departures of key personnel;

• additions or departures of senior management or key personnel;

• changes in market valuations of similar companies in reaction to industry events, even if these events do not directly affect us;

• investors’ general perception of us;

• changes in general economic, industry and market conditions including those resulting from political unrest, war, incidents of terrorism, or responses to such events;

• market volatility or downturns caused by outbreaks, epidemics, pandemics, geopolitical tensions or conflicts, or other macroeconomic dynamics ;

• the sustainability of an active trading market for our common stock;

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This concentration of ownership could limit your ability to influence corporate matters and may have the effect of delaying or preventing a change in control of our company and might affect the market price of our common stock.

Raising additional capital may cause dilution to our existing stockholders or restrict our operations.

We anticipate that we will seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements in the future to fund our operations.

We, and indirectly, our stockholders, will bear the cost of issuing and servicing such securities.

Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future offerings.

Our decision to issue debt or equity securities will also depend on contractual, legal, and other restrictions that may limit our ability to raise additional capital.

For example, the terms of our 2021 Revolver prohibit, subject to certain exceptions, our ability to incur additional indebtedness.

To the extent that we raise additional capital through the sale of equity or debt securities, your ownership interest will be diluted and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder.

The incurrence of indebtedness would result in increased fixed payment obligations and could involve restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights, and other operating restrictions that could adversely impact our ability to conduct our business.

Certain of the foregoing transactions may require us to obtain stockholder approval, which we may not be able to obtain.

Sales of a significant number of shares of our common stock in the public markets, or the perception that such sales could occur, could depress the market price of our common stock.

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While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions.

If a court were to find these types of provisions to be inapplicable or unenforceable, and if a court were to find the exclusive forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur

additional costs associated with resolving the dispute in other jurisdictions, which could materially adversely affect our business.

Our fourth amended and restated bylaws designate specific courts in as the exclusive forum for certain litigation that may be initiated by the Company’s stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.

If a court were to find these types of provisions to be inapplicable or unenforceable, and if a court were to find the exclusive forum provision in our amended

and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could materially adversely affect our business.

Our fourth amended and restated bylaws designate specific courts in Delaware as the exclusive forum for certain litigation that may be initiated by the Company’s stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.

Pursuant to our fourth amended and restated bylaws, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for state law claims for (1) any derivative action or proceeding brought on our behalf;

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The Court of Chancery of the State of Delaware and the United States District Court for the District of Massachusetts may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than to our stockholders.

General risks related to our business

General Risk Factors

If we fail to offer high quality customer service, our business and reputation could suffer.

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Therefore, failure to scale our customer service organization adequately may adversely impact our business results and financial condition.

Customers utilize our service teams and online content for help with a variety of topics, including how to use our products efficiently, how to integrate our products into existing workflows, and how to resolve technical, analysis, and operational issues if and when they arise.

While we have developed significant resources for remote training, including

an extensive library of online videos, we may need to rely more on these resources for future customer training, or we may experience increased expenses to enhance our online and remote solutions.

operational issues if and when they arise.

While we have developed significant resources for remote training, including an extensive library of online videos, we may need to rely more on these resources for future customer training, or we may experience increased expenses to enhance our online and remote solutions.

If our customers do not adopt these resources, we may be required to increase the staffing of our customer service team, which would increase our costs.

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Our products are or may be subject to U.S.

export controls, including the International Traffic in Arms Regulations, or ITAR, the Export Administration Regulations, or EAR, the Office of Foreign Assets Control, or OFAC, and other similar laws and regulations of our products and associated technology.

Obtaining export licenses can be a

costly and time-consuming process, often three to six months in duration.

export controls, including the International Traffic in Arms Regulations, or ITAR, the Export Administration Regulations, or EAR, the Office of Foreign Assets Control, or OFAC, and other

similar laws and regulations of our products and associated technology.

Obtaining export licenses can be a costly and time-consuming process, often three to six months in duration.

In addition, in some cases, a license might not be granted for shipment to a particular customer in a particular country.

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We are exposed to the risk of fraud or other misconduct by our employees, consultants, distributors, and commercial partners.

Misconduct by these parties could include intentional failures to comply with the applicable laws and regulations in the United States and abroad, report financial information or data accurately or disclose unauthorized

activities to us.

These laws and regulations may restrict or prohibit a wide range of pricing, discounting, and other business arrangements.

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We are required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting.

We are required to disclose changes made in our internal controls and procedures on a quarterly basis, and beginning with this Annual Report on Form 10-K, we are required to provide our annual management assessment of our internal control over financial reporting pursuant to Section 404.

We are required to disclose changes made in our internal controls and procedures on a quarterly basis to provide our annual management assessment of our internal control over financial reporting pursuant to Section 404.

As an emerging growth company, our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until the later of the year following our first annual report required to be filed with the SEC or the date we are no longer an emerging growth company.

At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.

At such time, our independent registered public

accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.

To comply with the requirements of being a public company, we may need to undertake actions, such as implementing new internal controls and procedures and hiring additional accounting or internal audit staff.

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In addition, when evaluating our internal control over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404.

If we identify any material weaknesses in our internal controls over financial reporting or we are unable to comply with the requirements of Section 404 in a timely manner or assert that our

internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting once we are no longer an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports.

If we identify any material weaknesses in our internal controls over financial reporting, including in connection with any past or future acquisitions, or we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting once we are no longer an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports.

As a result, the market price of our common stock could be materially adversely affected.

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• take advantage of acquisition or expansion opportunities.

We, and indirectly, our stockholders, will bear the cost of issuing and servicing such securities if required to raise additional funds.

Our decision to issue debt or equity securities will also depend on contractual, legal, and other restrictions that may limit our ability to raise additional capital and may require us to obtain stockholder approval, which we may not be able to obtain.

Any required additional financing may not be available on terms acceptable to us, or at all.

For instance, debt financing, if available, may involve restrictive covenants and could reduce our operational flexibility or profitability, and any new or refinanced debt may be subject to substantially higher interest rates, which could adversely affect our financial condition and impact our business.

Recent quantitative tightening by the U.S.

Federal Reserve, along with other central banks around the world, may further negatively affect our short-term ability or desire to incur debt.

A failure to obtain additional funding could prevent us from making expenditures that may be required to grow or maintain our operations.

Current capital market conditions, including the impact of inflation, have increased borrowing rates and can be expected to significantly increase our cost of capital as compared to prior periods should we seek additional funding.

Moreover, global capital markets have undergone periods of significant volatility and uncertainty in the past, and there can be no assurance that such financing alternatives will be available to us on favorable terms or at all, should we determine it necessary or advisable to seek additional capital.

If we raise additional funds by issuing equity securities, you may experience significant dilution of your ownership interest, and the newly-issued securities may have rights senior to those of the holders of our common stock.

If we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operational flexibility and would also require us to fund additional interest expense, which could harm our profitability.

require us to fund additional interest expense, which could harm our profitability.

Holders of debt would also have rights, preferences or privileges senior to those of holders of our common stock.

Adverse developments affecting financial institutions, companies in the financial services industry or the financial services industry generally, such as actual events or concerns involving liquidity, defaults or non-performance, could adversely affect our operations and liquidity.

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds, have in the past and may in the future lead to market-wide liquidity problems.

For example, on March 10, 2023, Silicon Valley Bank, or SVB, was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation, or the FDIC, as receiver.

As of March 10, 2023, we had substantially all of our cash and cash equivalents on deposit with SVB.

Although a statement by the U.S.

Department of the Treasury, the Federal Reserve and the FDIC stated that all depositors of SVB would have access to all of their money after only one business day following the date of closure and we and other depositors with SVB received such access on March 13, 2023, uncertainty and liquidity concerns in the broader financial services industry remain.

Inflation and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates.

Department of Treasury, FDIC and Federal Reserve Board have announced a program to provide up to $25 billion of loans to financial institutions secured by such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments.

However, widespread demands for customer withdrawals or other needs of financial institutions for immediate liquidity may exceed the capacity of such program.

There is no guarantee that the U.S.

Department of Treasury, FDIC and Federal Reserve Board will provide access to uninsured funds in the future in the event of the closure of other banks or financial institutions in a timely fashion or at all.

Our access to our cash and cash equivalents in amounts adequate to finance our operations could be significantly impaired by the financial institutions with which we have arrangements directly facing liquidity constraints or failures.

In addition, investor concerns regarding the U.S.

or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all.

Any material decline in available funding or our ability to access our cash and cash equivalents could adversely impact our ability to meet our operating expenses, result in breaches of our contractual obligations or result in violations of federal or state wage and hour laws, any of which could have material adverse impacts on our operations and liquidity.

In addition, if any parties with whom we conduct business are unable to access funds held in uninsured deposit accounts or pursuant to lending arrangements with a financial institution that is placed in receivership by the FDIC, such parties’ ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected.

We may engage in future acquisitions that could disrupt our business, cause dilution to our stockholders and harm our financial condition and operating results.

In the future, we may acquire companies, assets or technologies in an effort to complement our existing offerings or enhance our market position.

We have not made any acquisitions to date and we currently have no plans, proposals or arrangements with respect to any acquisition.

We may not be able to find suitable acquisition candidates and we may not be able to complete acquisitions on favorable terms, if at all.

Any future acquisitions we make could subject us to a number of risks, including:

On August 3, 2022, we entered into a share purchase and transfer agreement and completed our acquisition of 100% of the registered share capital of TRACE Analytics GmbH, a German limited liability company located in Braunschweig, Germany (Trace), for total potential purchase price consideration of $17.3 million, comprised of (i) a $14.4 million initial cash payment plus (ii) up to $2.0 million contingent cash consideration upon achievement of certain milestones over a twenty four month period and (iii) $0.9 million contingent pension liability holdback to be released upon discharging or transferring of such liability from Trace.

In the future, we may acquire additional companies, assets or technologies in an effort to complement our existing offerings or enhance our market position.

We currently have no plans, proposals or arrangements with respect to any acquisition.

We may not be able to find additional suitable acquisition candidates and we may not be able to complete

additional acquisitions on favorable terms, if at all.

The Trace acquisition, and any future acquisitions we make could subject us to a number of risks, including:

• the purchase price we pay could significantly deplete our cash reserves, impair our future operating flexibility or result in dilution to our existing stockholders;

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• we may be subject to litigation by terminated employees or third parties;

• we may be subject to additional liabilities that are not possible to be known at the time of the acquisition;

• we may incur debt and restructuring charges;

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We offer our customers the option to purchase extended warranty and service for regular system maintenance and system optimization on a fixed fee basis.

We generally recognize revenue from our extended warranty and service plans ratably over the contract terms, which typically range from one additional year to four additional years and could in some cases be subject to an early termination right.

We generally recognize revenue from our extended warranty and service plans ratably over the contract terms, which typically range from one additional year to four additional years and could in

some cases be subject to an early termination right.

A portion of the revenue we report in each quarter is derived from the recognition of deferred revenue relating to extended warranty and service contracts entered into during previous quarters.

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In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” generally defined as a cumulative change of more than 50 percentage points (by value) in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income or taxes may be limited.

We may experience ownership changes in the future as a result of shifts in our stock ownership (some of which may be outside

our control).

We may experience ownership changes in the future as a result of shifts in our stock ownership (some of which may be outside our control).

As a result, if we earn net taxable income, our ability to use our pre-change NOL carryforwards to offset such taxable income may be subject to limitations.

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Our effective income tax rate could be adversely affected by various factors, including, but not limited to, changes in the mix of earnings in tax jurisdictions with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in existing tax policies, laws, regulations or rates, changes in the level of non-deductible expenses (including share-based compensation), changes in the location of our operations, changes in our future levels of research and development spending, mergers and acquisitions or the result of examinations by various tax authorities.

Although we believe our tax estimates are reasonable, if the United States Internal Revenue Service or other taxing authority disagrees with the positions taken on our tax returns, we could have additional tax liability, including interest and penalties.

Although we believe our tax estimates are reasonable, if the United States

Internal Revenue Service or other taxing authority disagrees with the positions taken on our tax returns, we could have additional tax liability, including interest and penalties.

If material, payment of such additional amounts upon final adjudication of any disputes could have a material impact on our results of operations and financial position.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors